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sources in separate envelopes, but she did not save the envelopes
nor keep any other contemporaneous records of the sources of the
cash.
Nakamura, a certified public accountant, prepared the Kudos'
individual Federal income tax returns for 1990, 1991, and
previous years.9 Motomi would give him a manila envelope
containing the Kudos' Forms 1099, a sheet of paper listing
charitable contributions and other deductions, and other items
she thought important. Nakamura did not request or receive bank
records. In preparing their income tax returns, Nakamura did not
include in the Kudos' income certain payments from Toraya,
because he viewed them as nontaxable reimbursements.
The Kudos owned a personal residence in San Bruno,
California, during 1988 and until March 1989, when they sold that
residence. During April 1989, the Kudos purchased a personal
residence in Burlingame, California, for which they paid
$550,000. During 1990 and 1991, the Kudos made mortgage payments
on their personal residence in the amounts of $31,827.72 and
$27,413.86, respectively.
Facts Relating to the Takaos
When they filed their petitions, the Takaos resided in
Burlingame, California. Akiko died on June 10, 1995, at the age
of 69.
9 Nakamura also prepared the returns for the Takaos and
Toraya.
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